Bombardier confirms exit from A220 program with $US591m deal

February 13, 2020
A220 Airbus.
Photo: Andreas Spaeth.

Airbus now owns the lion’s share of the A220 program after Bombardier exited and transferred its shares to the aerospace giant and the Quebec Government.

The transaction is effective immediately and sees Airbus Canada with 75 percent of the program and the government with 25 percent.

Bombardier gets $US591 million from Airbus, with $US531 paid immediately and the remaining $US60 million coming in 2020-21. Warrants owned by Airbus are canceled and it is released of any funding obligations to Airbus Canada.

Bombardier has been signaling for some time that it would exit the commercial aerospace sector.

READ: Bombardier considers exit from A220 partnership

It has sold its regional jet business to Mitsubishi Heavy Industries and its aerostructures manufacturing business in Belfast to Spirit Aerosystems.

Bombardier chief executive Alain Bellemare said the A220 deal supported the company’s efforts to exit the sector and address its capital structure.

He said he was incredibly proud of the company’s many achievements in aerospace and its impact on the sector.

“We are equally proud of the responsible way in which we have exited commercial aerospace, preserving jobs and reinforcing the aerospace cluster in Quebec and Canada,” he said. “We are confident that the A220 program will enjoy a long and successful run under Airbus’ and the Government of Québec’s stewardship.”

The agreement delays by three years to 2026 the date at which Airbus can redeem the government stake and the transaction includes A220 and A330 work package production facilities in Saint Laurent, Quebec.

Airbus A220 Bombardier
The A220 visits Airbus headquarters in Toulouse.

Airbus subsidiary Stelia Aeronautique will create its own offshoot to continue the production of the work packages, which include the A220 cockpit and aft fuselage, in Saint Laurent for the next three years.

The A220 work will then be transferred to the Stelia Aerospace site in Mirabel to optimize the flow of the A220 final assembly line.

Airbus said the new agreement meant 3300 aviation jobs in Quebec were secure and underlined its commitment to the A220 and Canada during a phase of “continuous ramp-up and increasing customer demand”.

“This agreement with Bombardier and the Government of Quebec demonstrates our support and commitment to the A220 and Airbus in Canada,” Airbus chief executive Guillaume Faury said.

“Furthermore it extends our trustful partnership with the Government of Québec. This is good news for our customers and employees as well as for the Québec and Canadian aerospace industry.”

Faury thanked Bombardier, which developed the A220 as the C Series, for its strong collaboration during the partnership.

“We are committed to this fantastic aircraft program and we are aligned with the Government of Québec in our ambition to bring long-term visibility to the Québec and Canadian aerospace industry,” he said.

The single-aisle jet has proved a success for Airbus since it took majority control on July 1, 2018, and net orders for the aircraft increased by 64 percent to 658 aircraft at the end of January.

It sells the jet in the 100 to 150-seat market as complementary to its single-aisle A320 family.

There are now 107 A220s flying with seven customers on four continents after 48 were delivered in 2019.

Airbus is also building a second final assembly plant in Alabama in the US. That facility in Mobile began production in 2019.